Saturday, May 11, 2013

How Can They Reject What They Haven't Tried?

How can the Europeans reject "austerity" when they haven't really cut spending?

This is puzzling:

When history looks back at the debt crisis gripping Europe, the faces of angry protesters in Southern Europe railing against Berlin-mandated austerity will be a defining image.

But what will be the picture of turning point? Will it be captured in the spring of 2013?

French Finance Minister Pierre Moscovici seems to think so: This week he stated it plainly on the radio: “We’re witnessing the end of the dogma of austerity.”

I expect better from The Christian Science Monitor. While the article has figures on opinion surveys, it has no figures to show that Europeans have actually been cutting spending. That's what "austerity" means isn't it? Going without? Tightening your belt and spending less?

But my understanding is that Europeans are focused on deficit control, which is quite different than a policy of spending less. And spending in Europe is not going down--except for a brief and slight dip that can hardly be called dramatic:

In absolute terms, total general government expenditure grew steadily over the period from 2002 to 2012 – both in the EU-27 and in the euro area (see Figure 4). Only from 2010 to 2011 did total general government expenditure decrease slightly in absolute terms, both in the EU-27 and in the euro area. Revenues also grew steadily through to 2008 in the EU-27 and the euro area, decreased in 2009 and then increased again from 2010 onwards. In 2011 and 2012 total revenue exceeded pre-crisis levels both in the EU-27 and the euro area.

Where is the austerity in Europe?


I know a lot of people like to argue that simply not spending as much as spenders would like to spend means spending has been "cut" even if spending is higher than before, but that just isn't so, is it? You are obviously free to argue spending should be higher than it is or that we can afford to spend more. You might even be right on either question. But don't pretend we aren't spending more money.

From what I've read, Europeans have increased taxes far more than they have cut spending. This is consistent with a focus on reducing deficits but not of a policy of austerity as it is alleged Europeans are now abandoning.

So don't point to Europe as a source for bolstering your arguments because I don't see that dread "austerity" that has been stalking the land over there as too many here claim.